Revenue Agency, conversion of tax residence: publication of the circular – Gazzettino del Golfo

With a recent circular, the Internal Revenue Service has clarified how to interpret the latest tax residency rules introduced in 2023.

The circle is not. 20/E and with it the Revenue Agency has everything to know about the new rules regarding tax residence that introduced Legislative Decree No. 209/2023better known as the International Taxation Directive.

In fact, with Legislative Decree 2092023 the concept of home changes and the rules on physical presence also change as criteria for deciding accommodation and registered at the registration office. Before examining the new features, however, it is useful to understand what is causing all these changes? Why did the Government want to legislate on these aspects?

Basically, the innovations aim to align Italian legislation with the international standards and rules against double taxation. So we start with a clear request from the EU that Italy would have to accept. Double taxation occurs when income is taxed both in the country in which it was generated and in the country of residence of the taxpayer.

So we wanted to proceed with agreements to establish clearer rules on which country has or does not have the right to tax certain types of income, also to reduce the risk that a person has to -pay taxes to pay taxes twice! And so Italy has finally adopted practices that are already common and accepted at a global level, certainly useful in guaranteeing greater transparency, fairness and coherence in international taxes.

The main news on tax residency: what the AdE says

With the new circular, the Financial Group explained how the concept of home is changing. To give form to the new tax residence, from now on the home is defined as the place where the main personal and family relationships of the taxpayer develop. Before this, however, there was uncertainty: the home could be a place other than the residence where the taxpayer had a place of business.

It is therefore irrelevant whether a person has a physical residence or a tax home in Italy: another parameter is more important, namely wait. Let’s take the issue of employees smart operation: if they are in the country for most of the tax period, they will have to pay taxes here, since they are considered to be living in Italy fiscally, and this regardless of the fact that rods – other existing or other connection measurements such as civil residence, registration record and domicile.

Then the AdE pressed it the importance of the concept of physical presence. In practice, physical presence in Italy for most of the year (ie 183 days in a normal year and 184 days in a leap year) is an independent and decisive criterion for establishing tax residency.

Registration in the residential population register is no longer a true presumption of residence. Henceforth it applies only as a presumption of repayment, allowing the taxpayer to demonstrate determine an alternative.